An axle assembly for a vehicle comprising a stationary spindle and a rotatable axle shaft. An intermediate hub is supported on the spindle. Adjacent inner and outer wheel hubs are supported on the intermediate hub. A differential mechanism interconnects the inner and outer wheel hubs for driving both of the wheel hubs and for permitting relative rotation between the wheel hubs. At least one differential bushing is disposed between the differential mechanism and the intermediate hub. A gear reduction system interconnects the intermediate hub and the axle shaft for providing torque multiplication. A wet disc brake device is coupled between the spindle and the intermediate hub.